Why your car insurance claim might get rejected

While there are many steps we can take to manage risk, insurance remains the best way to protect your vehicle from unforeseen future damages. For car owners, insurance is probably as essential as the fuel that propels the vehicle.

Since road users vary in personality and level of experience, not to mention instances of poor driving behaviour, your safety and the safety of your car do not solely rely on you. Unfortunately, there are a wide array of things that can go wrong on the road, which is why every car owner should seek insurance as early as possible.

Many car insurance claims are partially or completely rejected on a yearly basis due to negligence of drivers, breach of contract, and policy exclusions.

Here are some of the possible reasons why your car insurance claim might get rejected and the things you must be aware of:

1. Unlicensed Driver
   This is one of the major reasons for rejection. If a car gets in an accident and it is ascertained that the driver is unlicensed, the insurance company will always reject the claim.

2. Unspecified Driver
   Most policies cover the car owner and will require that any other driver(s) should be specified, i.e. nominated and permitted to drive with regard to the policy. If this is not done prior to an accident, the claim is likely to be rejected.

3. Unroadworthy Vehicle
   There are many minor things that can constitute lack of roadworthiness: things that you must take care of before a car is used on the road.
   A broken windscreen wiper, worn tyre, broken light, faulty brake, etc. are some of the common factors. If a car is involved in an accident and it is discovered that it was not in a roadworthy condition, the insurance claim will likely be rejected.

4. Reckless Driving/Speeding
   Recklessness or gross negligence is one of the reasons that many claims get rejected. Insurers often insert what is known as the ‘Failure to Take Care’ clause in their insurance policies.
   On these grounds, the insurer may refuse to honour your insurance claim if it is ascertained that you were speeding, involved in other forms of reckless driving, or disregarding road traffic regulations.

6. Drunk Driving
   It is a no-brainer that you should never drive while drunk or under the influence of drugs (and other potentially harmful substances).
   If you are involved in an accident where you are driving under the influence of alcohol or other substances that impair your ability to drive, your insurance company will surely reject your claim should you make one.
7. Conflicting Details
   Most vehicles are now equipped with electronic devices that collect real-time data about the vehicle. In an event of an accident, your insurance company will review your claim and the data contained in the electronic device.
   If the information is at variance, they have every right to reject your insurance claim partially or completely.

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7. An Incurred Loss Not Covered by Policy
   There are some car owners who do not properly understand what is covered and what is not covered by their policy. Make sure that you know what types of incidents your policy covers before making a claim.
   It is essential that you sign up to an insurance policy that offers comprehensive coverage to avoid loss.

8. Incomplete, Inaccurate, Inflated, or Misleading Information
   Insurance companies are very meticulous with their processes and are sensitive to information. This means that you are required to be as plain, truthful, and comprehensive as possible while providing information in your claim.
   If the information provided is incomplete or inaccurate, they will be returned. If there is a deliberate attempt to submit a fraudulent claim, your claim will not be successful.

9. Upfront Photos or Pre-Inspection of Vehicle is Not Provided
   After an accident, it is essential that you take detailed photos of the condition of your vehicle and invite the insurance company to inspect its condition as soon as possible.
   You may have to refrain from taking further actions with your vehicle until they are through with their assessment.

10. Loss Occurred Due to Lack of Maintenance
    Every car has a maintenance routine specified by the manufacturers, which you are required to follow diligently.
    If a loss is associated with a lack of maintenance and the insurer ascertains that the condition of the vehicle contributed to the loss, your insurance claim will likely be rejected.

11. Failure to Comply with Insurer’s Request for Information
    Throughout the process of making a claim, your insurance company will need a lot of information. It will be in your best interest to comply and provide as much information as they request (within reason).
    Inspection certificates and proof of tracking devices are some of the most common documents requested by Insurance Companies.

12. Premiums are Not Up to Date
    Some people are not prompt with their insurance premiums, which may lead to a partial or complete rejection of an insurance claim. Unpaid premiums may mean that you are without cover and this means a total loss.

It is necessary to understand why your insurance claim was rejected by your insurance company. In most cases, it boils down to a misunderstanding of the policy and/or negligence on the part of the policy holder. As a car owner, you are required to carefully study your insurance coverage and fulfil your end of the agreement.

If your claim is rejected, your insurer will include the reasons for the rejection. You are then responsible for considering the reasons and determine if they are true. If they are not, then you may need to file a complaint.

You should also be ready to provide evidence to back your complaint. If you are honest and factual, the rejection can be upturned.

For help with your insurance claims, apply for a specialist broker.

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)